What is a loyalty card?

Loyalty card

A loyalty card is a loyalty program tool used to identify customers and to transfer a certain number of points to them for actions performed as part of a given loyalty program in which they participate.

The loyalty card may take various physical forms, depending on the level of complexity and the idea of the loyalty program, we distinguish:

• paper stamp card,

• plastic card,

• digital card,

What are the characteristics of different types of cards?

 The paper stamp card is the simplest form of loyalty card, often also carrying points in the form of stickers or ink stamps and allowing simultaneous identification of the user and verification of the points collected for a set reward. It is usually not personal, and a common practice is to destroy it or give it back when receiving a prize within the program, while the user receives a new one for further participation. It is becoming more common practice in service outlets to keep loyalty cards in a sorter or on a cork wall to make it easier for the participant to replenish points without carrying, which is the main disadvantage of physical cards. Relatively cheap to produce, they allow for simple programs based on the buy x get y principle.

Plastic cards are usually accompanied by a bar code (less frequently a QR code), which allows for customer identification in the IT system. The plastic card enables the construction of broader, more branched loyalty programs, where the participant may choose any reward from a catalog available as part of the accumulated points. Most often, the card is personal and requires enrollment in the program through an application form. This allows for a broader understanding of the card user’s shopping behavior and shopping basket analysis if the IT system is integrated with the sales system. The downside of a plastic card is often low awareness of the current status of the collected points, as well as the benefits that the participant may gain in the future for the points spent.

Digital card present in a cell phone loyalty application in the form of bar code or QR code is the most advanced type of loyalty card on the market. It has all the advantages of a paper card, i.e. immediate information about the prize and the number of points collected, as well as the advantages of a plastic card, i.e. the possibility to build extensive loyalty programs. The electronic card allows for even more detailed profiling of the customer, as well as for the selection of individual rewards based on current purchase needs.